China Information Technology has targeted revenue for 2009 of $107.5 million, an increase of approximately 26.5% from the stated goal of $85.0 million in the year 2008. Pro-forma net income is estimated at $32.9 million for 2009, representing a 21.9% increase from the Company's target of $27.0 million for 2008. Pro-forma earnings per share is estimated at $0.70 for 2009, up 25% from the Company's earnings per share target of $0.56 for 2008. The estimated pro-forma net income and earnings per share estimates for 2008 and 2009 exclude any non-cash expenses as a result of employee stock awards in 2008 and 2009 and amortization of intangible assets associated with recent acquisitions.
The Company expects to maintain a healthy growth rate through 2009 despite the current economic slowdown worldwide due to the end markets it serves. In November, China's State Economic Council unveiled a stimulus plan of approximately $586 billion for infrastructure projects aimed at boosting domestic demand.(1) In addition, the Guangdong Provincial Development and Reform Commission has indicated that Guangdong Province will spend $347 billion in the next five years to stimulate demand.(2) The Company's product mix is positioned to target city infrastructure planning so these recent announcements should work to its benefit. More important, the Company expects that the central government's desire for a harmonious society remains a strategic priority that will support increased investment in its served markets.
(1) http://www.chinadaily.com.cn/china/2008-11/10/content_7187901.htm "Economy Gets $586b Power Dose", November 10, 2008. (2) http://www.chinadaily.com.cn/regional/2008-11/12/content_7196952.htm "Guangdong Plans $347b Investment to Hold Back Downtrend", November 12, 2008.
At the same time, the Company is expanding its product line into a new vertical -- the Digital Hospital industry, leveraging its brand recognition as a leader in producing mission critical applications. In 1995, the Chinese government launched the Golden Health Project to promote the application of information and communication technology to healthcare, providing sizable market opportunities for digital hospital solutions. The total size of this market in China was estimated to be between $1.17 billion and $2.34 billion in 2007, and the market for picture archiving and communications systems ("PACS") and related equipment was estimated at $4.39 billion. (3)(4)
(3) http://www.erpworld.net/article/2008-07-24/0H4221952008.shtml "China's Health Care Sector to Be Reformed by IT", July 24, 2008 (4) http://www.100md.com/html/DirDu/2005/01/18/63/27/34.htm "China's Hospitals Speed Up Information Systems Buildup", January 18, 2006
"While the global economic slowdown has also affected China, we believe we are well positioned and should experience minimal impact to our operations as our products and services address both public and health security needs which are highly supported by the Chinese government," said Mr. Jiang Huai Lin, Chairman and CEO of the Company. "We remain confident in meeting or exceeding our previously stated goals for the year 2008, while our forecast and assumptions for 2009 have factored in some conservatism, leaving room for potential upside should the economic outlook improve."
Management will conduct a conference call at 8:30 am EST on Thursday, November 13, 2008 to discuss its third quarter 2008 results. To participate in the live conference call, please dial the call-in number five to ten minutes prior to the scheduled conference call time:
Date: Thursday, November13, 2008 Time: 8:30 am EST Conference Call-In #: 888-419-5570 International Callers: 617-896-9871 Conference Passcode #: 704 394 11 Webcast Link: http://www.visualwebcaster.com/event.asp?id=53266&pw=CIST For those unable to participate in the call at this time, please call: Replay Call-In #: 888-286-8010 International Callers: 617-801-6888 Replay Passcode: 16067019 Replay Expires on: Thursday, November 20, 2008
About China Information Security Technology, Inc.
Through its wholly-owned Chinese subsidiary, China Information Security Technology, Inc. ("CIST" or the "Company") headquartered in Shenzhen, China ("PRC"), is a leading application software developer, systems integrator and full-service Geographic Information Systems ("GIS") solutions provider to the public security and civil-use markets in China, aiming to use information technology to improve public safety and information management. Its main business lines range from digital public security, to intelligent border control, and Geographic Information Systems (GIS). Its commitment to leading- edge technology and quality assurance has won the Company numerous government and enterprise contracts throughout China. To learn more about the Company, please visit the corporate website at http://www.chinacpby.com .
Safe Harbor Statement
This press release may contain certain 'forward-looking statements' relating to the business of China Information Security Technology, Inc., and its subsidiary companies. All statements, other than statements of historical fact included herein are forward-looking statements, including statements regarding: the ability of the Company to attain its target revenues for 2008 and 2009; the expected impact of the current global economic slowdown on the Company; the general ability of the Company to achieve its commercial objectives; the business strategy, plans and objectives of the Company and its subsidiaries; and any other statements of non-historical information. These forward-looking statements are often identified by the use of forward-looking terminology such as 'believes,' 'expects' or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website ( http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.
For more information, please contact: Company Contact: Mr. Michael Lin Vice President, Investor Relations China Information Security Technology, Inc. Tel: +1-949-743-0868 Email: email@example.com Web: http://www.chinacpby.com Investor Relations Contact: Mr. Crocker Coulson President CCG Investor Relations Tel: +1-646-213-1915 (NY office) Email: firstname.lastname@example.org Web: http://www.ccgir.com